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Increase Ecommerce Sales Using Brick and Mortar Outlets as Fulfillment Centers

As a customer, one of the most satisfying things about buying online is knowing you’ll get your order delivered in a matter of hours. Indeed, ecommerce web stores now boast of delivery times in hours, not days. The order delivery/fulfillment time has become an important factor in the way customers rate a particular web store or prefer it over others.

BRICK AND MORTAR AS FULFILLMENT CENTERS

Some natural questions for a merchant include:

  • Does my ecommerce platform allow me to leverage my business presence across a sizeable geography, and let me use the retail stores or warehouses spread across a region as local fulfillment centers or locations?
  • Does the platform allow me to manage and track inventory for the online catalog at each location level?
  • Does it allow me to set up some kind of ‘allocation rules’ which determine the flow of orders to these locations based on city/state/zip?
  • If I’m also including the locations of my business partners (franchises, for example) and these are maintained under different legal entities (companies) in my Dynamics ERP, will the order documents flow to the respective entity in ERP upon integration?

HITACHI SOLUTIONS ECOMMERCE CHANNEL SETUP AND ALLOCATION RULES

The Hitachi Solutions Ecommerce platform has an intuitive and user-friendly answer to all of the above questions. Here’s how it works:

  • Each fulfillment location is treated as an order fulfillment channel entity in Hitachi Solutions Ecommerce.
  • The location also has its own associated warehouse configured in the system. The Dynamics ERP location/warehouse ID is mapped to the warehouse for item quantity tracking within Hitachi Solutions Ecommerce.
  • The merchant then sets up ‘rules’ – telling the system that:
    • Each geographic location (city/state/zip) has two ‘Fulfillment Centers.” These fulfillment centers are nothing but the channel entities created in Hitachi Solutions Ecommerce.
    • Setting up priority rules that tell the system to look at a particular fulfillment center at a location based on the priority assigned.
    • The system can be configured to check if the stock at hand at the selected location can fulfill the entire order or the order can be assigned without any stock check (for made to order products).

Once these rules are set-up, Hitachi Solutions Ecommerce does the rest! Needless to say, the system tracks item inventory at the location level and maintains location level stock quantity.

Oh wait! Did I mention that each channel (warehouse) setup in Hitachi Solutions Ecommerce maps to a location/warehouse in Microsoft Dynamics ERP? Similarly, each channel (warehouse) in Hitachi Solutions Ecommerce also maps to a Dynamics ERP company. So orders assigned to a channel will be saved in that particular legal entity (read company) post integration to Dynamics ERP.

A couple of simple illustrations below further simplify this whole setup.

Channel Allocation Setup and Rules
Channel Allocation Setup and Rules
fulfillment logic
Order Fulfillment Logic

VIRTUAL MIMICS REALITY!

You may be thinking, “This is splendid! But we’re looking for our web store to mimic how we shop in real life. Can you make that happen?”

This is a question that needs careful consideration. The client was a leading health supplements and nutrition products importer and reseller and hence had an already pan-nation presence in terms of both company owned and franchise retail stores, but also strategically located warehouses. And it was a company that had aggressive expansion plans. Surely the fulfillment matrix could work as it is at the city and state level combined, since the client’s presence was mainly in Tier 1 and Tier 2 cities in select states, but there was a possibility of Tier 3 cities coming into play in a phased manner. And surely we could tweak the already flexible platform to further make it intuitive for adding more cities in the allocation rules for future plans.

The lingering question remained – how do we make an ecommerce system mimic how we shop in real life?

THINK LIKE A C…USTOMER

In order to solve this question, let’s take a step back and project ourselves as a customer who sets out to buy some specific products from his preferred retailer in his city. This is how one would presumably shop, given his retailer has multiple stores available.

  1. Set out from home with a list or idea of what he wants to purchase.
  2. Go to the (next) nearest outlet and check for his products.
  3. If all the products he is looking for are available, purchase them and return home.
  4. If not, go to step 2 and start over.

So the idea was to figure out a way to find the city location based on the customer’s shipping address from the checkout page, find out all available fulfillment locations that have all items in stock, select the nearest fulfillment location, and assign that order to that location for fulfillment!

Of course, there was that question of how to determine the exact location based on the shipping address (since city name can be misspelled) and the small matter of finding the exact distance between a retail outlet and the shipping address.

LOCATION WEB SERVICES!!!

Location web services! Two web-service calls: one to find out the city based on the entered zip code, and the second to find out the distance between one source location (shipping address) and multiple destination locations (retail outlets)!

That’s all it took to tweak the Hitachi Solutions Ecommerce platform and deliver a custom location-based fulfillment solution to a happy customer who’s reaping in the benefits!

HITACHI SOLUTIONS ECOMMERCE ADVANTAGE

With an already versatile channel and allocation rules setup and a flexible platform and architecture that allows quick customizations that delight clients, Hitachi Solutions Ecommerce is the edge an ecommerce business needs to forge ahead. Benefits include:

  • Speed up the order deliveries to increase customer satisfaction.
  • Increase your outreach by rapid order deliveries to more locations, leading to an increase in sales revenue.
  • Leverage existing locations to be used as fulfillment locations, eliminating the need to invest in warehouses.
  • Monitor and manage inventory better with location level inventory tracking.
  • Have orders integrate to specific Dynamics ERP legal entities (companies) using the multi-company integrations feature.
  • Forecast sales better, thereby better managing inventory at each location.
  • Target your customer segments based on the orders placed and further increase sales revenues by offering a targeted catalogue with special promotions and discounts.

All this with just a few clicks and keystrokes! Happy selling, Ka-Ching!